What is the future of wearable payment devices?

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With a recent report saying that wearables will represent 20 per cent of all mobile transactions by 2020, PaymentEye spoke to two industry experts, Paul Pike, director at Intelligent Venue Solutions and Steve Daly, head of Radio Frequency Identification (RFID) at ID & C, about the rise of the devices and their potential.

Why now?

The devices sudden rise leads to the logical first question – why now? Why has adoption only started happening in the last few years?

Steve, whose company ID & C provides security and accreditation wristbands to the global festival industry, says the rise in adoption is all down to competition driving the change.

“The festival market is getting more and more competitive, and festival organisers’ overheads are increasing. Using cashless has proven to increase revenues by 30-70 per cent, and in the current environment, festival organisers cannot ignore this.”

For Paul, whose consultancy company works with organisations within the live events business, says that wearables have been de rigueur for many years and that they weren’t actually the issue. Instead, he says, “it was rather the way in which we could persuade the financial world to bring payments platform to the bands”.

Festivals a good test-bed?

Festivals are famous for being highly influential in terms of fashion, music, even food. Did the same apply to technology?

“By its very demographic, the festival industry is a great test bed for new technologies. It is the first place to go if you want to see how adoptable a new tech product can be,” said Steve.

He goes on to say how the festival industry is witnessing a wearable revolution this summer.

“This summer millions of people will have used a wearable device to make contactless payments in the middle of a field, without any physical cash, a phone or a bankcard. Other technologies will follow, but this is a revolution!”

Paul echoes this sentiment by pointing out that wearables are changing when the festival experience actually begins.

“Travel and general engagement with visitors before, during and after the event. Integration is becoming ever easier. This is the really exciting area for the future.

Mainstream

When asked how wearables will make the jump from being a highly popular festival trend to an integral part of everyday lives, Paul said it was not enough to merely allow payments to be made on wearable devices, “consumers have to want them. [They] will be given choices and the most desirable schemes will win out. Tokenisation provides the key.”

Steve says promotion and education are highly important in making that jump to mainstream popularity.

“The introduction of various payment wristbands from high street card providers has been well publicised. Live events certainly play a positive role when it comes to educating consumers on technologies that later become mainstream.”

In relation to other innovative technologies such as biometrics and Bitcoin, both experts said that it would depend on how quickly the financial world can innovate and get ahead.

Cash will stick around

As for traditional payment methods such as cards and cash Steve says their days aren’t numbered just yet.

“The diversity of people, the places they live and the ways in which they transact will probably mean cards and cash are around for many years to come.”

However, he caveats that by stating that in the more “test-bed” environment of festivals they are “definitely seeing a shift toward making cashless payments ubiquitous and we’re positive this will continue to influence other industries”.

It’s all about balance

Paul said the future of payments in general will be all about balancing user experience with a secure payment environment.

It therefore seems that for wearables to hit the mainstream there needs to be a healthy mix of education, promotion, improved systems and user experience.

With the likes of major players such Apple’s Apple Watch and Barclays’ own range of wearable payment devices, it shouldn’t be too long before smaller companies and start-ups start to innovate this exciting new area of payments.

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